Introduction: Understanding Payment Gateway Architecture

Capacity Planning: Storage, Bandwidth, and Constraints

When estimating capacity in an India‑region deployment:

Infrastructure constraints include database scaling, network throughput, and compliance‑grade encryption.

Designing RESTful APIs for Payment Gateways

A clear API layer improves developer experience and integration speed:

• Authentication APIs
  
  
  • POST /api/auth/register – Register merchants and users.
    
    
  • POST /api/auth/login – Generate JWT tokens.
    
    
  • POST /api/auth/logout – Revoke sessions.
    
    
• Payment APIs
  
  
  • POST /api/payments/initiate – Create payment intent.
    
    
  • GET /api/payments/status/{id} – Retrieve transaction status.
    
    
  • POST /api/payments/capture – Capture authorized funds.
    
    
  • POST /api/payments/refund – Initiate refunds.
    
    
• Merchant & Customer Management
  
  
  • POST /api/merchants/create – Onboard new merchants.
    
    
  • GET /api/merchants/{id}/transactions – List merchant transactions.
    
    
  • POST /api/customers/add-card – Tokenize a new card.
    
    
  • DELETE /api/customers/remove-card/{cardId} – Delete stored payment method.
    
    
• Notification APIs
  
  
  • POST /api/notifications/send – Push alerts.
    
    
  • GET /api/notifications/history – Fetch notification logs.
    
    

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Data Model Best Practices for Transaction Systems

An optimized schema ensures data integrity and fast queries:

• Users: Stores profile, verification status, timestamps.
• Payment Methods: Tokenized card or wallet details linked to users.
• Transactions: Tracks amount, currency, status, gateway references.
• Invoices & Subscriptions: Manages billing cycles, payments, and renewals.
• Refunds: Handles partial and full refund records.
• Logs: Captures audit trails for compliance and troubleshooting.
  

High‑Level Microservices Architecture

Breaking the gateway into core services enhances maintainability:

User Management Service

Handles registration, KYC, authentication, and profile updates.
Ensure robust access control using OAuth and JWT tokens.

Payment Processing Service

Integrates with external processors (Stripe, Razorpay) for authorization, capture, and settlement.
Scale stateless instances behind a load balancer to meet peak TPS.

Subscription & Billing Service

Manages recurring payment plans, invoice generation, and dunning workflows.
Automate notifications for renewals and cancellations.

Notification & Logging Service

Delivers real‑time alerts via email, SMS, push, and webhooks.
Aggregate logs in centralized stores for audit and analytics.

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Inter‑Service Communication Patterns

Efficient communication is key to reliability:

• API Gateway: Single entry point with routing, authentication, and rate limiting.
• Message Queues (Kafka, RabbitMQ): Asynchronous processing for fraud checks and notifications.
• Service Mesh (Istio, Linkerd): Secure service discovery, traffic management, and observability.
• Event Streaming: Real‑time updates across services for payment status and subscription events.
• Webhooks: Notify external systems of transaction outcomes.
  

Strategies for Scaling and Optimization

1. Horizontal Scaling: Add service instances to distribute load.
2. Caching: Use Redis or Memcached for session data and frequently accessed records.
3. Asynchronous Processing: Offload tasks like fraud analysis and invoice generation to background workers.
4. Database Sharding & Replication: Partition data by merchant or region to maintain low latency.
   

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